SHEETAL SHELTERS P.LTD,MUMBAI vs. ITO 5(3)(2), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI

Before Shri Mahavir Singh (JUDICIAL MEMBER) AND Shri G Manjunatha (ACCOUNTANT MEMBER)

I.T.A Nos. 964/Mum/2014 (Assessment year: 2011-12)

Shri Ketan S Vakharia vs Addl CIT-TDS, Rane-2, Mumbai E/203, Neel Kamal Co-op Housing Society Ltd, Chincholi Road, Malad (W), Mumbai-64 PAN : AAZP6595J APPELLANT RESPONDEDNT

Appellant by None Respondent by Shri Saurabh Deshpande

Date of hearing 20-11-2017 Date of pronouncement 20-11-2017 O R D E R Per G Manjunatha, AM : This appeal filed by the assessee is directed against the order of CIT(A)-14,

Mumbai dated 21-09-2013 and it pertains to AY 2011-12. 2. The brief facts of the case are that the assessing officer, on examination

of records noted that the assessee had not filed the quarterly TDS statements

in Form 24Q within the time specified u/s 206 / 206A of the Income-tax Act,

1961 r.w.r. 37 of the Income-tax Rules, 1962 for the financial year 2010-11

which were required to be filed at the end of every quarter. The AO further

noted that under the provisions of section 200(3)r.w.r. 31A, a quarterly

statement of TDS in Form 24Q is required to be filed for every quarter on or before 15th of subsequent month immediately following the end of every

quarter. However, the assessee failed to file the TDS return within the time

specified under that section and accordingly issued show cause notice and

asked the assessee as to why penalty u/s 272A(2)(k) shall not be levied. The

assessee, vide letter dated 12-08-2011 submitted that the assessee had

already filed TDS returns for all the quarters for the financial year 2010-11.

Though there is a delay in filing quarterly statements for first 3 quarters it s

because of the consultant, who was out of town; therefore, the assessee could

not file the TDS returns within the time allowed under the Act. The assessee

further submitted that he is a small time trader and does not have any full time

employees to lookafter the affairs of his business and he was fully dependent

on the consultant, who was supposed to file the TDS returns; however, the

consultant could not file the TDS returns in time because of his pre-occupation

during that particular point of time. However, the last quarterly statement has

been filed within the time allowed under the Act. Therefore, there was no

deliberate attempt to file the returns so as to derive any undue benefit and

hence, penalty cannot be levied u/s 272A(2)(k) of the Act, 1961. As soon as the

consultant was available for the service he filed the returns. The AO, after

considering the explanation of the assessee observed that though there is a

delay in filing quarterly statements for first 3 quarters, the assessee failed to

make out a reasonable cause for not filing the TDS returns in time as required

by the Act. The assessee also failed to discharge its burden to prove essentially

in making out some plausible cause against the proposed levy of penalty. It is

well established legal position that if the assessee wants to be free from penal

consequences, burden of proof rests firmly with it so as to show that the said

default or circumstances were beyond the control of the assessee. In this case,

this has not been demonstrated. Therefore, it is a fit case for levy of penalty

for failure to file quarterly statements of TDS and hence levied penalty u/s

272A(2)(k) for Rs.12,675. Aggrieved by the penalty order, assessee preferred

appeal before CIT(A); however, the CIT(A) affirmed the findings of the AO to

confirm penalty levied u/s 272A(2)(k) of the I.T. Act, 1961. Aggrieved by the

order of C IT(A), assessee is in appeal before us. 3. None appeared for the assessee. We have heard the Ld.DR, perused the

material available on record and gone through the orders of authorities below.

The AO levied penalty u/s 272A(2)(k) for failure to file quarterly statement of

TDS in form 24Q. The AO levied penalty on the ground that the assessee failed

to file the required quarterly statement in form 24Q within the specified time

allowed under the Act, but also failed to explain the reasons for not filing said

statements. It is the contention of the assessee that quarterly TDS statements

has not been filed because his consultant, who was supposed to file the

quarterly TDS statements, was out of town during the relevant period of time.

The assessee further submitted that the assessee is a small time trader and has

no regular employees to lookafter the affairs of his. The assessee is fully

dependent upon the consultant for its accounting as well as legal matters. The

required TDS deduction has been made and also paid into the government

account with interest. The quarterly statements have been filed belatedly due

to the reasons beyond his control. Therefore, there is a reasonable cause for

not filing the statements within the time allowed under the Act and hence, the

AO was incorrect in levying penalty u/s 272A(2)(k). 4. Having heard, we find force in the reasons given by the assessee for not

filing the quarterly TDS statements within the time allowed under the Act, as it

is not a case of the AO that the assessee has not deducted TDS and also not

filed TDS statements. The assessee has deducted TDS and paid to the

government account. This fact has not been disputed by the AO. The assessee

also explained the reasons for not filing quarterly statements in Form 24Q

within the time allowed under the Act. The reasons given by the assessee for

not filing quarterly TDS statements appear to be bona fide. Therefore, we are

of the view that the AO was incorrect in levying penalty u/s 272A(2)(k) for not

filing the quarterly TDS statements within the time allowed under the Act

despite the assessee has explained the reasons which were beyond the control

of the assessee. The CIT(A), without appreciating the facts, upheld penalty

levied by the AO. Therefore, we delete the penalty levied by the AO and set

aside the orders of authorities below. 5. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 20th November, 2017.

Sd/- sd/- (Mahavir Singh) (G Manjunatha) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dt : 20th November, 2017 Pk/- Copy to : 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR /True copy/ By order

Asstt. Registrar, ITAT, Mumbai